Aluminum Ingot Stocks In China Slowed Down, No Room For Further Sharp Decline in Short Term 

According to SMM statistics, on December 28, 2023, the current inventory of domestic aluminum ingot available in the market was 308,000 mt, and the total social inventory of aluminum ingots was 434,000 mt, a decrease of 9,000 mt from Dec 25 and 12,000 mt from a week ago, and also down 59,000 mt from the same period last year, setting a new low for the year. At the beginning of the week, the recent rapid decline in social inventory encountered significant resistance. This is mainly due to the poor performance of outflows from warehouses, causing aluminum inventory to grow rapidly in Gongyi. However, along with the falling aluminum ingots arrivals in the South and East China markets in mid-week, the domestic destocking accelerated slightly. SMM predicts that the domestic social inventory of aluminum ingots will extend the decline. The current social inventory has dropped rapidly by more than 250,000 mt compared with mid-November, and the destocking accelerated since late November; currently domestic aluminum ingot inventories has hit new lows for two consecutive weeks. Excluding ingots held as collaterals, the actual current inventory is only about 300,000 mt. Since mid-December, due to the strong performance of aluminum prices, the supply and demand pattern of aluminum ingots has been affected, which increased the goods available in the market. SMM predicts that during the end of the year, due to the continued impact of production cuts in Yunnan on the arrival of aluminum ingots, although domestic aluminum ingot inventories temporarily extend the decline, there is little room for continued significant decline in inventories. SMM estimates that the lowest level of domestic aluminum ingots social inventory will range between 400,000-450,000 mt, and the inventory may begin to rise recently (at the beginning of January).